Advantages and disadvantages of acquiring a microcredit

This type of loan is being fairly well established among those who are starting to mature ideas of big and small businesses. Learn about the advantages and disadvantages of this type of credit.

The microloans are small loans offered to individuals with a need, or with low resources, to support new entrepreneurs to carry out their business ideas.

In such a way that allows people with no resources to finance work projects that provide them an income and also a new way of survival, is a very important part of micro-finance.

It should be noted that have a maximum amount that depends on those who contribute, but tend to be quite lower than other products, and can finance 100% of the project. It generally requires a business plan or business endorsement and offer seriousness to microcredit, since no guarantees are required.

Its objective at the corporate level is to offer small amounts of money to people with a viable business idea who cannot request credits from banks because they have no guarantees.

How to get a microcredit
To get a microcredit you have to think about the use that will be given, how to recover the money that will be paid and look for all the existing possibilities of microcredit that can be accessed. Once this is done, you must make a business plan that shows how the money is invested.

It is important to think how much money is needed to start, logically should not ask for money without knowing why it is needed or what microcredit is more appropriate. You must know the use of resources and develop a plan to know how to generate cash flow, repayment of the loan and how the debt will be paid. With this is what is then chosen the best microcredit thinking about interest rates, terms, economic amount and other possibilities that interest.

Advantages

• Obtaining credit instantly.
• Minimum interest rate.
• Small amounts, more convenience in payment of fees.
• Healthy credit history.
• Meet the need of the collaborator. (In times of emergency such as illness, death, etc.).
• In case of death of the owner, the debt is canceled to avoid leaving this commitment to his relatives.
• Do not require guarantee.

Disadvantages

• Minimum loan (depends on the salary that you earn).
• Interest in arrears due to late payment.
• Payments must be covered every two weeks.
• In case of delay the employee must pay double on his next payment.

With this analysis we realize that in some financial, there are benefits when acquiring the personal loans, since it has a very low interest rate and the requirements that request are the minimums.

In sum, microloans are a variant of the traditional lender system that are intended to reach the neediest groups and without resources that cannot access financing.